The exchequer has recorded a surplus on a 12-month rolling basis for the first time since the beginning of the pandemic, according to the latest monthly figures from the Department of Finance.
Continued strong tax revenue and a steep drop in spending due to the unwinding of Covid-19 supports resulted in a €32m positive balance for the public finances in the 12-month period to the end of May.
The surplus in the year to date was much bigger at €1.4bn, compared to a deficit of €6bn for the same period last year, although the 12-month rolling figure is considered a better indicator of the trend.
The improvement marks the effective end of the fiscal challenge associated with the pandemic after two years of massive Government spending to support the domestic economy.
The tax take in May across the major headings of income tax, corporation tax and VAT continued to be robust.
A total of €30.1bn has been collected to date in 2022, up 27pc on last year, indicating an impressive rebound in employment, company profits and consumer activity.
May was a VAT month and total VAT collected in May of €2.9bn was up 28pc on an annual basis, in line with the year-to-date increase of 27pc.
Corporation taxes of €5.2bn so far this year have also made a significant contribution, as increased profitability in the multinational sector has led to windfall receipts.
Some of the improvement in the State’s financial position can also be attributed to the effects of inflation feeding through to the public finances as higher prices and wages boost the gross amounts collected.
Spending was down €2.6bn year-on-year to €38.9bn as the gradual withdrawal of pandemic support schemes, such as the Employment Wage Subsidy Scheme (EWSS) relieved pressure on the exchequer.